So, after I get my Seller to Deed me the property, I am planning on getting my settlement company to get a title commitment for me. Should an issue come up, and the seller can’t pay for it, is there a way for me to separate the lien from the house, and give the title issue to the seller, while I get the house? If the amount is large enough (more than I’m willing to pay), do I just walk?
How are you buying the property? Subject to or financing it out. If you are financing it out the lender will require the lien be cleared up. If you are paying cash or taking it subject to you have other options.
You should have gotten your title company to do a quick pencil search for you before you buy the property to check for liens and judgments. If there is a lien on the property it will transfer to you unless it is paid off. You can try to see if the lien holder will release the property from the lien. You can also see if you can negotiate a reduced payoff amount for the lien.
If you can’t pay it off but you feel the property is still a good deal and will cover the lien when you sell it, leave it on the property until you sell it. If it is a big lien that won’t go away, give the seller his property back with a Quit Claim Deed and move on to the next deal.